Those of us who spend a good deal of time buried in the world of work comp sometimes need to look up and out, to see where we ‘fit’ in the larger world. There’s so much to do, and so few resources to do it, and even less time, that it’s far too easy to keep the head down and just keep plowing forward.
While that’s understandable, it is also a problem – in some cases, a big problem.
Understand that workers’ comp is just the fourth largest line of property and casualty insurance, with just about 10% of total premiums flowing to comp. New capital can flow into, and out of, insurance lines pretty readily. If and when a major catastrophic event hits, comp will be quickly, and dramatically, affected with premiums headed up and capacity down.
Work comp will spend about $31 billion this year on medical expense; the national health care budget is about $2.4 trillion. Comp is less than 1.5% of total medical cost.
Pharmacy expense in comp is about $4.5 billion, that’s about two percent of total pharma costs in the US.
When one considers there will be another thirty million (30,000,000) Americans covered by group health and Medicaid programs in just over three years, at an average cost of about $7500, the relative significance of comp on the national medical scene becomes even more apparent.
What does this mean?
Comp is the flea on the tail of the dog. We can’t tell the dog where to go, or whether to be happy or run or jump, but we sure better be ready for any of its moves.
Oct
15
